DEMCO Customers Could See Savings As Result of New Contract, Greene Says

The Louisiana Public Service Commission approved two rural cooperative power contracts at is monthly public meeting today. Dixie Electric Membership Corporation (DEMCO) and Jefferson Davis Electric Cooperative (JDEC) both came to the LPSC this week for final approval of new power supply contracts with NextEra Marketing, a subsidiary of NextEra Energy, one of the largest energy companies in the world.

The unanimous Commission decision was the culmination a rigorous, two-year competitive RFP process. That process resulted in 95 bids from 13 energy companies, which laid out the options each CoOp had to replace its current power contracts. Those contracts are set to expire in 2024 for DEMCO and 2025 for JDEC. Multiple experts from each CoOp and the Commission vetted and confirmed that the most reliable and affordable choice for the two CoOps was the proposal from NextEra.

“Based on the robust amount of proposals, this Commission yet again got to see how many companies desire to do business in Louisiana and the benefits that making those companies compete can bring to utility customers,” according to Dr. Craig Greene, Public Service Commissioner from District 2, which includes Central. 

“Companies were asked to put their best foot forward to serve Louisiana customers, and NextEra stepped up in a big way to partner with the CoOps,” he said.

The two contracts with NextEra allow the CoOps to utilize the Midcontinent Independent System Operator (MISO) regional transmission organization. This allows the CoOps to access power from multiple sources rather than tie themselves to the costs of particular power plants. It also enables the CoOps to pivot to new technology and resources as each becomes cost effective, Greene said. 

The DEMCO contract includes a 25-year fixed price component for a 100 MW solar development in Tangipahoa Parish. This strategy is projected to bring DEMCO and JDEC around $160 Million in savings over the next 10 years.

After offering a less competitive losing bid, Entergy Louisiana, the state’s largest incumbent utility, opposed the CoOps’ contracts with NextEra, Greene said. 

Even after Commission Staff and an Administrative Law Judge ruled against Entergy and recommended the contracts with NextEra, Entergy came to the Commission and asked the Commission to reject the CoOps’ choice to partner with NextEra, Greene said.

“The contracts bring flexibility, while tapping into the resources a modern grid provides, allowing for price stability that the CoOps, and even investor-owned utility customers, do not have right now,” Dr. Greene said. 

“I think Ms. Rivers said it best when she said that is something this Commission should always approve.”

Greene said Ms. Freya Anderson Rivers, a utility customer in Baton Rouge, stood up to Entergy’s attorneys and commended the Commission for approving an innovative power contract that provides options and the framework to lower customer bills.